Cause and Effect in European Politics and Law

Waiting for Putin

Dessislava Dimitrova, Ralitsa Kovacheva, November 12, 2010

Russian Prime Minister Vladimir Putin comes to Sofia on Saturday. He will betray his habit to discuss Bulgarian-Russian energy projects over the phone, because he “had shown understanding" to the busy schedule of his Bulgarian counterpart Boyko Borissov. Who, himself has no problem with working on Saturday because he usually doesn't rest on Saturdays, he explained.

One of the reasons for the upcoming meeting is the signing of the contract between the Bulgarian Energy Holding (BEH) and Gazprom for the creation of a joint venture for the construction of the Bulgarian section of the South Stream pipeline, initially planned for November 15 in Moscow.

Another topic of the summit will again be gas prices. Although, according to Borissov, since GERB (the ruling minority party) is in power the price of gas has steadily fallen, he will seek bigger reduction. Actually, of all the 5 price adjustments this year, only one is downward, moreover - with less than 1% as a result of the "big breakthrough" in Evxinograd negotiations this summer. According to the Minister of the Economy and Energy Traycho Traykov, Bulgaria hopes to achieve a reduction of more than 5%.

The issue of the Belene Nuclear Power Plant is more complex. Currently, both sides are negotiating the appreciation of the project and are looking for a potential investor. You probably remember that this spring Borissov was ready to accept a Russian loan of 2 billion euro for the plant, but standing between the European Energy Commissioner Günther Oettinger and the US Ambassador to Bulgaria James Warlick, he muttered that Belene would not be built without an European investor. Now a Bavarian company is expected to officially manifest its interest in investing in the project. On the other hand, the Bulgarian Prime Minister has invited Serbia and Croatia to participate in the project with 2% each and their answers are expected by Saturday.

According to a publication in the Belgrade newspaper Blic, "Serbia is more than ready to accept the offer of the Bulgarian prime minister", Serbian Minister of Energy Petar Skundric said. According to him, however, such a "serious" decision requires time and the deadline which the authorities have to decide whether to agree expires on Saturday. According to most Serbian experts, Bulgaria has given too short a deadline, the newspaper writes. Besides, the neighbours are also unhappy with the proposed share. According to Skundric, the official offer of the Bulgarian side was Serbia to participate with 1 to 2%, but Serbia will insist on at least a 5 per cent share.

According to an official release of the Croatian government, Bulgarian Prime Minister Boyko Borissov had sent a written invitation to the Prime Ministers of Serbia and Croatia Boris Tadic and Jadranka Kosor to participate in the project with a share of 2% each. Kosor, however, stated that her country has an energy strategy of its own that sets out the priority energy projects and therefore will not take part in the construction of the Belene NPP.

About a possible participation of Serbia we first learned in May, after Boyko Borissov's visit in Belgrade. In August Borissov himself confirmed this information, however without specifying the size of Serbian investments. Even then, Serbian media reported a 5% stake, estimated at 300 to 350 million euro. Initially it was expected Serbia to receive a formal offer in September, so that by the end of the month the government to decide whether or how to participate in the project. In an interview for euinside the former governor of the Serbian Central Bank Radovan Jelasic commented, that it would be a wise decision for Serbia to participate in the project.

The Bulgarian position as stated by the Prime Minister at the latest cabinet meeting, is that the state will give no more money for Belene and the invested so far two billion levs (1.025 bn euro) should be included in the assets of the project.

Perhaps the two prime ministers will find time to indulge in the sweet memories of the Sunny Beach cognac and BT cigarettes (famous Bulgarian brands from the socialist era), because as the Prime Minister explained, we should also use these memories to "alleviate the conditions and opportunities for the Russians to accept our investments and goods”. And also "to use this summit and to get away from any possibilities for speculations and politics with it, and to put right on a pragmatic level our relations with the Russian Federation". The latter would indeed be the best. But it is the least possible.

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